Company Interview / Why Henry is shopping for JB Hi-Fi

Key points:

Major bank mortgage applications weaken, led by NABJB Hi-Fi (ASX:JBH) faces softer sales and margin pressurea2 Milk volatility tied to supply disruptions and recoveryIris (ASX:IRE) drops after strong pre-result rally and leadership change

Henry Jennings from Marcus Today views National Australia Bank’s latest update as largely in line, but shaped by a competitive and slowing mortgage market. NAB’s mortgage applications are down around 15%, which Jennings notes sits between Westpac’s 20% and ANZ’s 12% declines, highlighting intense competition among the majors. He points to net interest income and margin coming in slightly below expectations and a 3.8% share price fall, amid headwinds from the housing market, higher inflation, Reserve Bank rate rises and recent budget changes.

On retail, Jennings sees JB Hi-Fi (ASX:JBH) as a victim of cautious consumers trading down and deferring big-ticket purchases. Revenue lands a touch below market forecasts and margins appear under pressure. With the stock off about 11.8%, he regards the sell-off as overdone and notes around $70 as a potential support level, suggesting it may be reasonable for investors to start “dipping a toe in”.

Jennings also highlights supply issues for a2 Milk, with the stock initially hit hard before recovering as product availability improves. He adds that the market’s “shoot first, analyse later” approach also affects Iris (ASX:IRE), which sells off after a strong run into results and a CFO transition.